Need for innovative tools and products

Aimie Pardas
New Straits Times
05-17-2001
Need for innovative tools and products
Byline: Aimie Pardas
Edition: Computimes; 2*
Section: Focus
Memo: Focus issue on telecommunications.; (STF) - According to the International Telecommunication Union (ITU)'s basic indicators for 2000, Malaysia has one of the highest telephone penetration rates in Asia. The ITU indicators report that the country has 21.07 main telephone lines for every 100 population which is above the average of 8.56 lines per 100 people for Asia and the world average of 15.33 lines per 100 persons. When compared to neighbouring countries, only Singapore and Brunei have more lines per 100 people, with 48.45 and 24.59 lines respectively. For each 100 people, Indonesia has 3.14 lines, Thailand has 8.57 lines and the Philippines, 3.98 lines. ITU statistics also show that last year, Malaysia has 15.48 cellular mobile subscribers per 100 people, more than twice the Asian average of 6.53 subscribers but close to the world average of 11.94 subscribers. At the same time, the local telecommunications industry is bombarded with introduction of such technologies as wireless application protocol (WAP), general packet radio services (GPRS), broadband, third-generation (3G) telecommunications and mobile commerce (m-commerce). Despite these rapid changes, the industry still has a long way to go in terms of developments and liberalisation of the market.

THE last several years have been an exciting time for the local telecommunications industry and this year, it can expect major trends which will include broadband access, major price reductions, the introduction of more value-added Internet protocol voice and data services, alternative local loop technologies such as wireless local loop and fixed wireless access such as local multi-point distribution services.

However, the industry still lacks innovative products and is slightly slower to pick up new technologies and trends when compared to countries in the region such as Singapore.
In addition, there is still much to improve, especially the quality of the telecommunications network, says IDC Market Research (M) Sdn Bhd's telco and consultant analyst Stephanie Wong.

"The good thing is that the incumbent has started to reduce its leased circuits tariffs and IDC expects to hear more good news this year."

Stringent regulatory controls and closed telecommunications market are also affecting the growth of the local telecommunications industry, says Wong.

"The industry is still regulated, therefore prohibiting foreign providers from bringing in their products."

However, she adds that IDC expects a more conducive and competitive telecommunications market in the next two years as the country's deregulation process is materialising.

For example, the Government's revision of entry requirements on the provision of telecommunications-related services, one of the first initiatives to kick-start the deregulation process of the country's telecommunications market, has attracted interests of local non- telecommunications operators and global service providers in the local scene.

"In 2000 alone, we have witnessed a couple of longtime Internet service provider licensees rolling out their services and non- telecommunications operators applying for application service provider (ASP) class licence," she says.

She adds that last year, Malaysia saw an increase in interest among global service providers to establish their presence in the country.

However, Wong says the telecommunications industry has still not reached a desired level of liberalisation as foreign telecommunications providers such as NTT are allowed to operate but not lay infrastructure here.

"The Communications and Multimedia Commission is barely starting to deregulate the industry, so many things are not finalised. I don't think global infrastructure will be allowed in the next two to three years."

According to Wong, the regulatory framework and interconnection issues need to be resolved carefully and promptly to not impede network and service roll-outs.

She says the roll-outs will be slow if the market restricts foreign providers from playing a bigger role as these global players can bring in more innovative technology and products.

"The incumbent is still very much protective about opening the local loop and this will impede the growth of the telecommunications industry," she adds.

Deregulation is also a major issue discussed by participants of a recent International Institute of Communications (IIC) telecommunications forum held in Kuala Lumpur.

IIC Malaysian Chapter's chairman Mohd Bashir Shariff says the telecommunications industry as a whole should move to self- regulation, and regulators should fade away over time. The only time regulators need to be involved is when bandwidth has to be distributed, he adds.

"In a nutshell, there should be liberalisation, democracy, a free market enterprise and survival of the fittest where consumers can emerge as king, with self-imposed discipline and independently set industry standards," he says.

The forum's chairman Gunnulf Martenson says in the liberalisation of communications, governments should not be involved so that competing operators can offer services to customers. Governments, he adds, should step in when market forces are not going the right way or when companies do not work in a manner that is beneficial to consumers.

However, Martenson says the telecommunications industry still needs a regulatory authority. He advises the local industry to look at countries where liberalisation is taking place, such as in Europe or the United States.

"A more liberal attitude is needed to let new players into the telecommunications market," he says.

aimie@nstp.com.my

Illustrations/Photos:
Caption: Wong: Quality of network has to be improved.

(Copyright 2001)